Being in high amounts of debt can make you feel stressed, distraught and powerless, even if you continue to earn a high income. Financial stability is less concerned about the amount that you earn and more concerned about the health of your cash flow. Therefore, even if you are a high earner, you can be facing a difficult financial scenario with seemingly overwhelming debts.
In this situation, you may be tempted to think that you can solve it alone. But the constant communication from creditors and ever-increasing interest on your debts can mean that you are always fighting an uphill battle. If you have been hesitant to consider bankruptcy in the past because you think that you will lose your assets or you believe that it’s only the right solution for low earners, you may want to look into Chapter 13 bankruptcy. The following are ways in which Chapter 13 bankruptcy can be an empowering solution for those with a steady income.
An automatic stay will be put in place
If your mental clarity is being affected by the constant communication from creditors, you’ll be pleased to know that filing for bankruptcy will put a stop to that immediately. When filing for bankruptcy, an automatic stay is put in place, meaning that debt collectors and creditors can no longer take any actions to retrieve the money owed.
Chapter 13 does not involve the liquidation of assets
Unlike Chapter 7 bankruptcy, Chapter 13 bankruptcy is tailored toward a stable earner who has the means to pay off their debts steadily. The process involves the rearrangement of debts into a 3- to 5-year plan, where the debtor makes repayments each month. This can feel empowering because you’ll be able to create a realistic road map for the future.
If you are struggling with overwhelming debt and you want to minimize the damage to your credit score while addressing these debts successfully, filing for Chapter 13 bankruptcy could be the right option for you.